The Wall Street Journal is reporting that Apple (NASDAQ:AAPL) is looking to expand its supplier base. The company may be looking to grow its stable of contract manufacturers to assemble devices for it, and the resulting increase in production would help it better meet demand. Apple product launches hindered by supply constraints are all too common these days. However, it's worth noting that bottlenecks around necessary components could still potentially hold back production.
Foxconn has caused considerable harm to Apple by association. There has been much controversy around its labor practices and other human rights issues, from which Apple may want to distance itself. Additionally, having more suppliers compete for business can drive down prices and Apple would benefit from cost savings. Foxconn is reportedly uninterested in cutting its prices.
In this segment of Tech Teardown, Erin Kennedy discusses Apple's manufacturer diversification with Evan Niu, CFA, our tech and telecom bureau chief.
Erin Kennedy and Evan Niu, CFA, own shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.